The Senate endorsed energy tax language Sept. 23 that would extend expiring production tax credits for renewable energy, including hydropower, and would expand the incentives to ocean, wave, and tidal technologies.
By 93-2 vote, senators added the energy incentive language to a broader tax bill that would continue other tax credits for businesses and adopt a one-year fix to the Alternative Minimum Tax so millions of Americans would not be subject to higher income taxes. The amended bill was passed and sent to the House, 93-2.
The tax package, presented by Senate Finance Committee Chairman Max Baucus, D-Mont., and the committee's ranking minority member, Sen. Chuck Grassley, R-Iowa, would extend the project in-service date for production tax credits for hydropower for two years, to Jan. 1, 2011. That is a year less than a three-year extension proposed in an earlier draft. (HNN 9/17/08)
Eligible facilities would include incremental hydropower resulting from additions or upgrades to existing hydro plants, and hydroelectric projects installed at non-hydropower dams and licensed by the Federal Energy Regulatory Commission.
The bill also would expand the list of eligible renewables to include ocean, tidal, and in-stream hydrokinetic technologies. Those facilities would have a full three-year period in which to be placed in service to be eligible for incentives; they must be placed in service before Jan. 1, 2012.
The bill would extend for one year, to Dec. 31, 2009, the Clean Renewable Energy Bond program for public power utilities and electric cooperatives to finance plants that generate electricity from renewables. It also would place a new $800 million limitation on the renewable energy bond program.
The $18.2 billion renewable energy tax package would be paid for by reducing some tax incentives, mainly to oil and gas companies.
Reid to House: "Mess with our package ... it will die"
The House of Representatives still must vote on continuing the renewable energy tax credits, which have failed to pass several times this session. The White House said earlier in the day that it would support the measure.
At the end of debate, Senate Majority Leader Harry Reid, D-Nev., urged the House to "wise up and accept" the Senate's energy tax-extending package.
"Don't send us back something else," Reid said. "We can't get it passed. If they try to mess with our package, it will come back here, it will die."
The House passed its own energy package containing incentives to help hydropower on Sept. 16 on a vote of 236-189. (HNN 9/17/08) That bill also contained offshore oil drilling language expected to doom the bill.
The House bill also would expand federal tax incentives for renewables projects and would extend the in-service date for eligible projects. It would reauthorize the Clean Renewable Energy Bond program, setting a $1.75 billion bonding limitation. It also would create a federal renewable electricity standard requiring utility companies to generate 15 percent of their electricity from renewables by 2020.
The House bill includes a three-year extension of expiring production tax credits for renewable energy, applying to facilities placed in service after Dec. 31, 2008, and before Jan. 1, 2012. As is the case in the Senate bill, the House bill states eligible facilities would include incremental hydro from additions or upgrades to existing hydro plants, and hydroelectric projects installed at non-hydropower dams and licensed by FERC.
The House bill also would expand the list of renewables eligible for production tax credits to include marine and hydrokinetic projects, including energy from waves, tides, and currents, in oceans, estuaries, tidal areas, and free-flowing streams. Qualified marine and hydrokinetic facilities must have a capacity of 150 kW or more, and must be placed in service before Jan. 1, 2012.